Theoretical model for predicting survival of quantity surveying firms in Nigeria

Abstract

Firms are susceptible to environmental changes like national economic instability, which affects their survival. Consequently, firms need to ascertain their tendency to survive the challenges of the environment. Therefore, this study investigated the factors influencing the failure of quantity surveying consultancy firms and proposes a survival tendency model that allows decision-makers to assess their propensity to withstand economic downturns. Through observational research, QS firms were studied for 10 years (2010 to 2020) which typifies the economic contraction phase in Nigeria. Archival and qualitative data were obtained from 130 QS firms and Cox regression was adopted to analyse the data. The results revealed that 43% of QS firms failed during the economic downturn due to external loans obtained for their operations. Furthermore, purchasing new software/technologies and employing more staff increases the probability of failure while research and development, diversification, and maintaining the number of partners reduce likelihood of failure. A model was proposed for QS firms to ascertain their survival during economic downturns using the significant predictor (i.e. method of financing). This study, thus, recommends that managers of QS firms should finance their operations using savings from professional fees and profits. They should also decide on strategies that can be implemented to survive economic crises.